Town leaders and others present their ideas for fiscal management to government
© Kevin Higgins photo/TC Media
MONEY TALKS - Mayor Al Hawkins, left, and Director of Finance Barry Griffin represented the Town of Grand Falls-Windsor at last Friday’s pre-budget consultation meeting in Grand Falls-Windsor.
Grand Falls-Windsor Mayor Al Hawkins wasted no time letting Health and Community Services Minister Susan Sullivan know what his municipality was looking for in the upcoming provincial budget.
The first item on the Town of Grand Falls-Windsor’s ‘wish list’ was remediation of the old Abitibi mill site.
Hawkins was one of several people who presented their ideas to Sullivan, who was representing the provincial government on this stop on the 2014 pre-budget consultation tour.
Sullivan, along with Exploits MHA Clayton Foresy, heard nine groups present their wish list of items.
Prior to the presentations, Sullivan offered up the provincial government’s view of the financial situation heading into the 2014-15 budget.
She said the province projected a $450.6-million deficit for 2013-14 at the mid-point of the year, which, despite being the highest deficit since 2004-05, is $113.2-million less than was originally projected when the budget was approved last year.
She said heading into the coming budget government is holding the line on the10-year sustainability plan it rolled out last year, and people can expect to see reviews of Memorial University, College of the North Atlantic, regional health authorities and unfunded pension liabilities in this the second year. She said government expects to have a surplus situation in the third year of the plan.
“One of the goals has to be on pension and post-retirement liabilities, as it represents $5.6 billion, as of March of this year, or 67 per cent of the province’s deficit,” she said. “It’s not program spending, as people would say, or even services provided…67 per cent of our debt as to do with our pension liability.”
She added that 28.6 per cent of the province’s revenue up to the mid-point of the 2013-14 budget came from offshore royalties, with personal income tax coming in at 16.5 per cent and sales tax contributing 13.6 per cent.
“For every $1 change in the price of a barrel of oil it has a $26-million impact on provincial revenue, while a one cent change in the exchange rate affects the revenue by $27 million,” she said. “You can see where the volatility of these can affect where we’re going to be at the end of the year.”
She warned no one should expect to see the province’s coffer return to a surplus with government’s 2014-15 budget.
“Not that it comes to any surprise to anyone when I tell you that for budget 2014 that we . . . will still be facing down significant deficit issues,” she said. “We talked about that for now two years, so I think people are very much aware of that.
“We need to still make crude decisions and wise decisions going forward…but there is going to be some very difficult decisions as well. I can tell you this is never easy.”
Easy or not, Mayor Hawkins pointed out the former Abitibi property sits “dilapidated” in a prime area of Grand Falls-Windsor, and it’s time the province did something about it.
“In addition to private sector investment, there are recreational opportunities with this property, so we are requesting that funds be allocated for the removal and site remediation so that we can move forward with plans to develop this property,” he told Minister Sullivan.
However, it was the potential of the identified drivers of economic growth in the sectors of healthcare, life sciences and information technology that dominated most of his presentation.
“We request the government of Newfoundland and Labrador to consider Grand Falls-Windsor as a key delivery centre for electronic health information to support the National Electronic Health Records,” he said. We also request the provincial government actively take a lead role in constructing additional laboratory space at the College of the North Atlantic campus in Grand Falls-Windsor to offer new healthcare programs critical to supporting our long-term provincial health needs. We also request funding to be provided to advance a satellite campus of the School of Nursing for Grand Falls-Windsor.”
Mayor Hawkins added Grand Falls-Windsor has been identified by independent studies to be a top-rated North American data centre site, and he encouraged the government to seriously consider the town as the site to set up a disaster recovery data centre for provincial government information storage and access, and provide support to establish the town as a data centre for national and international companies.
Municipalities Newfoundland and Labrador
Taxation was also on the list of items presented by Municipalities Newfoundland and Labrador (MNL)president Churence Rogers.
He told Minister Sullivan the MNL believes the entire provincial portion of the Harmonized Sales Tax (HST) should be rebated to municipalities, not just the amount associated with large capital projects.
“The federal government rebates their portion of the HST, so should the provincial government,” he said. “This is a matter of fairness; governments should not tax governments.”
MNL is also asking for amendments to legislation to allow municipalities to blend business and realty taxes, with further amendments to permit municipalities to impose an accommodation levy; and to compel all departments, agencies and institutions of the provincial government to comply with municipal permitting and development processes.
They also want the province to forward a share of the Provincial Gas Tax to municipalities to invest directly in needed infrastructure; and they want relief from obligations to remit payroll and road taxes.
He also reminded Sullivan about what MNL and the provincial government has accomplished in its fiscal framework review, and the importance of its completion, which has a target date of 2015.
“However, in the interim, our municipalities need something in this year’s budget to show progress and to hold them over until the broader solutions are ready,” he said in reference to MNL’s budget request.
Town of Bishop’s Falls
Mayor Bob Hobbs of Bishop’s Falls said his town was also concerned with the taxation system, and he offered several ideas to Minister Sullivan, including the reform of the property tax system.
“We believe innovative solutions must be explored, and this includes the establishment of a municipal income tax that is administered by the province,” said Mayor Hobbs. “Granted, this idea is somewhat contentious among municipalities; therefore, strong leadership is required if this policy option is to be given its due consideration.
“Change is never easy, and often incremental steps are required, but the possibility of establishing a municipal income tax system should not be dismissed until it has been extensively studied.”
He also acknowledged the problems of the property tax system in relation to non-property owners within municipalities being exempt from paying the “quintessential tax from the revenue toolbox,” but availing of the same services as property owners.
“The matter becomes even more troubling for local governments when you consider the individuals who live on the peripheral of municipal boundaries. They, too, are free and clear of municipal taxes although they indirectly benefit from the same services,” he said. “All this creates a taxation system where property owners pay for services that are utilized freely by others, and the poll tax is far from a solution to that disparity.”
He suggests a municipal income tax system based on an individual’s ability to pay and applicable to all residents of the province regardless of residency, and disbursed to municipalities through an acceptable formula.
He agreed with Mr. Rogers on the matter of property tax and governments, while cluing up his presentation by saying there is a need for provincial programs to assist municipalities in the replacement of aging equipment.
Vince MacKenzie, representing the Newfoundland and Labrador Association of Fire Services, talked of the need to replace old fire trucks.
“In 2010, we advised and government acknowledged there were over 45 per cent of the approximately 500 fire trucks in the province that were 20 years old and were considered obsolete, with 15 per cent more approaching the same plight within four years” he said. “In 2014, of the 180 fire trucks needing replacement, only approximately 30 per cent have been addressed in five provincial budgets.”
MacKenzie said the problem will just get worse, and crisis will result, if funding is not provided to solve this problem.
“We urge government to allocate at least $5 million per year for the next three to five years to mitigate the urgent need for up-to-date, reliable and safe firefighting apparatus for the men and women who volunteer to protect our province’s citizens from fire and other disasters,’ he said.
He also suggested government put more resources into fire prevention, through improved public education, more inspections of seniors homes and, possibly, legislation or incentives to encourage installation of sprinkler systems in senior’s facilities that have several housing units.
Among the other presenters at the meeting was the Exploits Community Employment Corporation, which urged government to complete its review it instated several years ago regarding the ‘freezing’ of additional funding for supported employment, as well as, in the interim, re-instate funding levels to ensure continued operation and advancement of the Supported employment Program.
The Community Centre Network, represented by Gail Thorne of the Exploits Community Centre, voiced concern over the efforts to reduce poverty, and the role the eight community centres in the provincial network play in this endeavour.
Minister Sullivan heard from Darlene Thomas of Hospitality Newfoundland and Labrador of the need to improve tourism marketing to ensure continued growth of this industry.
“To reach our vision of $1.6 billion (in tourism revenue) by 2020 we need to create more and lasting demand among non-resident travellers… “Newfoundland and Labrador has made great strides in marketing the past few years, but our competition is growing…to keep on track we need more marketing investment,” said Thomas, noting non-resident travelers make up only 10 per cent of the total travelers in the province, but contribute 42 per cent of the tourism revenue.
Elizabeth Jenkins spoke on behalf of the Home Care Association of Newfoundland and Labrador, and stressed the need for funding to assist with payroll expenses, and to offset education, nursing, administrative and overhead costs.
The pre-budget stop at Grand Falls-Windsor is one of many on this year’s tour. The consultations continue through February at other locations across the province.